War, instability weighing down global economy: WTO chief

The chief of the World Trade Organization (WTO) warned Monday that global instability and war are weighing down the world economy.

WTO Director-General Ngozi Okonjo-Iweala said at the organization’s biennial meeting in the United Arab Emirates that higher prices for food, energy and fertilizer — caused in part by global tensions — are “fueling political frustration” around the world.

“Let’s not pretend that any of this will be easy. If we thought the world looked tough in mid-2022, when we were slowly emerging from the pandemic, and the war in Ukraine had shaken food and energy security, we are in an even tougher place today,” she said.

“Looking around, uncertainty and instability are everywhere. Geopolitical tensions have worsened. Conflict has spread, as we see here in the Middle East, and — away from the headlines — across parts of Africa and the Arab world,” she added.

While Okonjo-Iweala did not reference the Israel-Hamas war, she pointed to ongoing disruptions to shipping caused by Houthi rebel attacks in the Red Sea. 

“Shipping disruptions in vital waterways like the Red Sea and the Panama Canal are a new source of delays and inflationary pressure,” she said.

She said people are “feeling anxious” about the future, noting that elections in at least 60 countries will be held this coming year. She did not directly speak to the U.S. election, where President Biden and former President Trump are headed to a likely rematch in November.

During his time in the White House, Trump reportedly threatened to withdraw the U.S. from the WTO and levied tariffs against numerous countries while in office. Okionio-Iweala also said cooperation between countries was “under attack” in her remarks.

“Trade has become a four rather than a five-letter word in some quarters,” she said.

“Without cooperation on trade, we would move towards an increasingly fragmented world economy, and all of these priorities would become harder, costlier, and in some cases impossible to achieve. People would become more disappointed, more vulnerable, more frustrated,” she added.

Comoros and Timor-Leste also joined the WTO at the opening meeting on Monday to bring the number of members to 166, she said.